Need Super - any hints?

Possibly someone aligned with IFAAA | Independent Financial Advisors ?? (I know nothing of this association, but if you can find someone who is willing to simply provide a once off advice, then that's a good start - so many will give you advice, but it's linked to an account that they manage through a platform that only they can manage, but this is wandering off the course of this discussion).

Need to get those targeted questions ready.

 

Sounds like an unfounded fear to me. What is the basis for this belief?

 

First, ask yourself: What is your risk appetite? i.e. how much of your super do you want in higher risk investments?

Second, do you want to tinker or let the fund manage your allocation?

Finally, do you need insurance in Super? I'm assuming no because of your original post.

I would choose an industry fund with the lowest fees that satisfy your individual situation:
- If you want a balanced, no tinkering super portfolio, the cheapest is Hostplus low cost index balanced.
- If you want to tinker and/or you have a higher risk appetite, you could go for Sunsuper index balanced.

I personally dislike ING living super. They changed their fee structure that cost me and others a lot of money - so I left and joined SunSuper. If you had a large balance and wanted to buy individual LICs/ETFs/shares, then it might be worth considering.

There are plenty of threads on Super in this forum, so welcome and enjoy.

Not advice.

 

I'm liking my HostPlus ChoicePlus account.

Heres what the website says about the investment options...

"You can select from:

• Shares in the S&P/ASX 300 Index (the current list is available on the Choiceplus online platform).
• ETFs – the ETFs offered on Choiceplus have been selected by Hostplus based on recommendations from Lonsec, a specialist investment research house and the leading provider of quality managed fund and ETF research in the Australian market.
• LICs – the LICs offered on Choiceplus have been selected by Hostplus on recommendations of independent ratings agencies
• Term deposits – choose from a selection 90 day, 180 day or 365 day term deposits from ME Bank. The actual term deposit rates are set each week by ME Bank and are available on the Choiceplus platform."

The ETFs include some Vanguard, SPDR and Blackrock (relying on memory here, I think it's correct though).

 

I agree. Why would the gubbermint tamper with the fund that holds their own superannuation?
Unless Jess is talking about all super funds, and not just worried about hubby's one.

 

Depending on your personality Direct Choice options may encourage one to “fiddle” with negative impact on long term investment returns.

The HostPlus “Indexed Balanced” option has received quite a lot of good press. Simple, set and forget, dirt cheap and is likely to outperform most of the more expensive “actively” managed alternatives over the long term:

The following might be helpful:







https://hostplus.com.au/-/media/Fil...ts/2017/Hostplus-Annual-Report-2017.pdf?la=en

Not advice.

 

The whole super industry needs to be overhauled. It's the golden goose for the finance industry. And what value do they add to the supply chain? I'd say almost nothing.

My suggestion would be to give every person access to the same super fund. This fund only invests in the global efficient frontier, or at least an Australian version as agreed upon by independent investment experts. The fund would be managed by an external non-government entity (could even choose Vanguard or something similar) and the government can't touch the funds. Any money that enters super is grandfathered - IE the rules can't be changed on money that has already entered the fund. The fees for this fund should be minimal because of the huge FUM.

In theory, everyone should have the lowest fees, without the need to worry about super. Without the unscrupulous skimming off the top more people will be able to fund their own retirement benefiting everyone except the crooks.

Sounds fair to me.

 

I tend to agree. Tinkering will probably reduce the return, so why bother when all it does it takes more time. This is the absolute low cost balanced fund for set and forget.

 

Mediocrity equally for everyone. Not me.

 

It's not mediocrity, it's the market return, which is going to be better for everyone as a whole group: Best documentary on investing I have ever seen. If you are new, please watch this. Best 1 hour 21 minutes you will ever watch. Passive index investing for the win! • r/personalfinance

I was just reading about the MySuper option, which is probably what most people should use: MySuper | ASIC's MoneySmart

 

Spot on NoDoggies...

This is the fund (Host Plus) I got....and have the following invested:

1. 20% Index Balanced
2. 10% AFI LIC
3. 10% ARGO LIC
4. 20% Vanguard Australian Shares ETF (20%) (VAS)
5. 20% Vanguard Global Shares ETF (VGS)
6. 20% Blackrock Top 100 Global Companies ETF

 

Hi Sash,

I really like your allocation. May I ask what is the fee for this portfolio? Thanks

 

It varies for each component but from memory:

1. Admin fee pa $72 plus Choice Please $180
2. Fee for Index Fund on 40k $16
3. Fee on AFI 20k $24
4. Fee on ARGO 20k $24
5. Fee on 40k VAS $56
6. Fee on 40k VGS $72
7. Fee on 40k IOO $160

So about $604 on about 200k so about 0.3% on total portfolio for 200k

 

What was the footnote to that option in the Investment returns table? I think it says (C) but it is too teeny tiny for my eyes!

ETA: AustralianSuper Balanced option has return (net of fees & taxes) of 11.41% for what I *think* is the same 5year period.

 

Thank you @sash. Very cheap.

 

Sash, can I ask why you've bothered with the 40% australian equities (half literally by cap weight and the other half near as makes no difference) and the 40% global equities (all by cap weight) when you've got the rest already in a cap weight balanced fund?

Cost if you had the whole lot in index balanced would be $152.
Cost as is is $604.

You've quadrupled your costs to achieve what? A slightly higher weighting to equities than the balanced index fund offers, and being slightly overweight the large cap end of international equities.

Even if that's something you specifically want to do, you could achieve the same thing far more cheaply by taking it out of the choice section and just splitting it between the balanced index section and the indexed Australian and international equities classes.

The only thing you'd be losing is your 20% weighting to semi-active management. Even the most die hard LIC > ETF fan is going to find it hard to argue that a 20% weighting is going to provide enough outperformance to make it worth quadrupling your holding costs.